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Eyes on Trade is a blog by the staff of Public Citizen's Global Trade Watch (GTW) division. GTW aims to promote democracy by challenging corporate globalization, arguing that the current globalization model is neither a random inevitability nor "free trade." Eyes on Trade is a space for interested parties to share information about globalization and trade issues, and in particular for us to share our watchdogging insights with you! GTW director Lori Wallach's initial post explains it all.

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December 29, 2009

Trade Preferences Suspended in the Name of Democracy

The Obama administration deserves applause for suspending
the African Growth and Opportunity Act (AGOA) trade preferences of Niger, Guinea,
and Madagascar last week.
Under the
AGOA legislation, the President has the power to deny AGOA preferences to a
country that has not “established, or is making continual progress toward
establishing….the rule of law, political pluralism, and the right to due
process, a fair trial, and equal protection under the law.” The Obama
administration suspended the trade preferences of Niger,
Guinea, and Madagascar
because they have all experienced undemocratic transfers of power recently.

It’s too bad the standard trade agreement model doesn’t
contain these types of democracy-preserving provisions, as Hondurans found out
when their democratically elected President was ousted in a coup this
June.

Given that 70% of Honduran exports go to the United States, the threat of trade sanctions
would have been a powerful bargaining chip as the U.S. tried to reverse the coup. Our
reckless trade policy came back to bite us, however. In an August
press call, the State Department explained the source of our powerlessness:

REPORTER: Yeah. I just wanted you to elaborate why
[suspending trade preferences] is not a possibility.

SENIOR STATE DEPARTMENT OFFICIAL ONE: We have an agreement
called the CAFTA agreement [i.e. the Central American Free Trade Agreement], and apparently provisions in that make it
impossible – very difficult, if not impossible, for us to do that, so we can’t
– it looks like we cannot go down that route.